Effective 4 Ways To Soften the LTCG impact..!

Effective 4 Ways To Soften the LTCG impact..!FROM EdelweissThe LTCG tax was reintroduced in 2018-19 year’s budget, much to the chagrin of many people. It was proposed that the government intended to create a level playing field between growth & dividend oriented schemes and hence the amendment had been proposed.we had explained how LTCG will be charged on your investments. Now we take the narrative forward and discuss how you can soften the impact on your portfolio.1. Capitalize on the post budget market volatilityThe market has certainly witnessed a roller-coaster ride, post the budget announcement; especially in the past few days when the market was in a correction mode. While the drop in the markets might be disheartening, you can use it as an opportunity for tax-loss harvesting by clearing all investments and selling them after 1st April, 2018; as the loss can be set-off against capital gains & can also be carried forward.2. Benefit from the ceiling limit of Rs. 1 lacThe provision has clearly stated that all capital gains below Rs. 1 lac will not be under the tax purview. Hence, you can book your LTCG at regular intervals and re-enter the position if you would like to stay invested.3. Be aware of the side-effectsThe amendment in the LTCG provision will impact all investment options which have an equity exposure (other than ULIPS). Hence, before you decide to re-jig your portfolio consider the tax- advantage of a product along with product cost, potential returns and goals.4. Alternatively, you can invest in ULIPSThe LTCG tax burden does not extend to unit-linked insurance plans (ULIPs). Buying ULIPs, will allow you to invest in both equity and debt based on your risk appetite, without worrying about the tax burden. But, merely taking investment decisions based on tax advantage or disadvantage is being short-sighted. Always understand the product construct before taking a final call.Therefore, (if you already haven’t done so) NOW would be a good time to get in touch with your financial advisor and decide how you should spread your investments – such that you are able to balance your tax burden, without compromising on your returns!!

Effective 4 Ways To Soften the LTCG impact..!
Reviewed by S. Chitra
on
February 13, 2018
Rating: 5Effective 4 Ways To Soften the LTCG impact..! FROM Edelweiss The LTCG tax was reintroduced in 2018-19 year’s budget, much to the chagrin...